It's the Economic Rollout, Stupid

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If Obama fails to deliver on his plan — both in scope and in speed — it could wreak havoc with an already precarious economy and roil global markets that have become relatively stable since he began outlining his program.

Barack Obama’s elaborate rollout of his economic recovery plan could provide an impressive early victory for his incoming administration.

But it also carries risks.

If he fails to deliver on his plan — both in scope and in speed — it could wreak havoc with an already precarious economy and roil global markets that have become relatively stable since he began outlining his program.

If he fails to treat seriously his invitation to congressional Republicans to engage in the process, it could inject an atmosphere of mistrust and resentment that would haunt his future domestic policy ambitions.

Team Obama

“I can’t think of another incoming president who faced something this tricky,” said Joe Lockhart, who was press secretary in the Clinton White House.

The extraordinary circumstances are prompting wholesale changes in what has become the normal transfer of presidential power.

Obama often notes that the nation has one president at a time. But there are, in essence, two of them working at full capacity right now in Washington.

At the White House, President George W. Bush is managing the nation’s response to the new aggressions in the Middle East and the ongoing wars in Iraq and Afghanistan.

Across Lafayette Park at the Hay-Adams hotel, Obama is driving the government’s response to the domestic economic crisis.

Perhaps more remarkable, both men appear content to let the other conduct his business without much interference.

Obama has routinely refused to comment extensively on foreign events and the Bush administration’s handling of them.

Early on, the president made it clear that he wouldn’t support a massive economic recovery plan such as the one promoted by Obama. But since then, Bush has largely refrained from criticizing his successor’s efforts or from pressuring Republicans to block them.

Bush even kept a low profile when Obama moved in on his turf.

No other president in modern times has arrived in Washington nearly three weeks before his Inauguration and begun engaging Congress on such a critical issue in such a big way.

But the urgency of the nation’s economic condition appears to have rendered any partisan snubs or complaints of bruised egos impolite, if not downright crass.

“Nearly half a million Americans are losing their jobs every month at this point, with millions more in jeopardy,” said John Dearie, the executive vice president for policy at the Financial Services Forum.

A recently released report “reveals that the Fed fears that the economy could contract for all of 2009 and even into 2010,” he added. “To arrest the rate of contraction and establish a foundation for recovery, most economists agree that a stimulus of between $700 billion and $1 trillion is needed fast.”

With that backdrop, the rollout of Obama’s economic recovery plan and lobbying push behind it has taken on all the hallmarks of a furious, mini political campaign.

He’s dominating the news cycles this week, even overshadowing the swearing-in of the new Congress, with speeches and events promoting aspects of his recovery plan and shaping the political debate around them.

One of his team’s most striking coups came at the start of the week when, through news media leaks and a Capitol Hill appearance, the president-elect redefined the stimulus package from an infrastructure spending spree to the biggest tax cutting measure in history.

Obama’s high-profile events are being buttressed by an aggressive grass-roots campaign conducted by nearly 20 progressive organizations under the umbrella name Campaign for Jobs and Economic Recovery.

That group is holding rallies and other public events this week in the home states of Senate Republicans, including moderates such as Sens. Arlen Specter of Pennsylvania and Olympia Snowe and Susan Collins, both of Maine.

The Campaign for Jobs and Economic Recovery is also contemplating a television ad blitz. And its member groups, including unions such as the Service Employees International Union, are conducting telephone and e-mail campaigns urging members of Congress to support Obama’s plans.

The lobbying effort isn’t entirely groundbreaking. In 2005, Bush announced in his State of the Union address that Social Security privatization would be the top domestic aim of his second term. He then held a series of coordinated events to promote and explain his plan to average Americans.

But four years ago, Bush really was the president when he began pushing his legislative agenda on Capitol Hill; Obama isn’t yet.

In addition, Bush had opponents. An organization called Americans United to Protect Social Security shadowed him on his trips around the country and protested outside each event.

Many of the members of the Social Security coalition are now part of the pro-Obama camp. What’s different, said Jeremy Fund, a spokesman for both groups, is that there are no signs of a similarly organized, grass-roots push against Obama’s economic recovery plan.

Obama’s front-loaded legislative push mirrors the way he expedited his Cabinet selections following the election to send strong signals to the global markets that he would be aggressive.

“In light of the deepening economic crisis, the president-elect directed his economic team to begin the work of preparing a disciplined economic recovery and reinvestment plan immediately after the election,” said transition spokeswoman Stephanie Cutter.

Both Presidents Ronald Reagan and Bill Clinton, who took office during economically troubled times, announced their treasury picks on Dec. 10.

Obama announced his economic team, headed by treasury secretary pick Timothy Geithner, on Nov. 25 — just three weeks after his election. And the Dow Jones average jumped nearly 400 points on the news.

“He’s been very deliberate in laying out a plan and sending signals: We have a plan, these will be the people to run it, this is how big it will be, and here is how Congress is going to handle it,” Lockhart said.

The market’s positive response, however, could be a double-edged sword, since failure to deliver legislation could lead to economic calamity.

“Equity markets are forward-looking by nature and are already positioning and pricing with the expectation of the coming stimulus,” Dearie noted.